Jamdat Mobile files for IPO

Russell Beattie has a thorough post on Jamdat Mobile’s IPO filing. This is significant because this is the first so-called “wireless application” play to hit the market. For those of you that don’t know, Jamdat is a provider of global wireless entertainment applications and enabling technologies that support multiple wireless platforms to wireless carriers, handset manufacturers, media companies, and independent content developers. Looking at Venturesource, I see that Jamdat was first funded in March 2000 precisely the time when VCs thought wireless was the next big thing. Many of these companies are no longer around, but it is nice to see Jamdat make it through such turbulent times, only with $33 million in VC funding.

As an investor, the difficult part of any consumer wireless play is that the wireless world is a walled garden and not an open network like the Internet. This means you are dependent on the carriers for deals and access. This is starting to change but even if you want to go to your own sites through your wireless phone, it is not easy. In addition, imagine the competition to get distribution from the carriers-there are lots of little guys knocking on the door. On the upside, if you are able to get the deals, you have an incredible ability to scale. Just look at Jamdat’s numbers: $90k revenue in 2001 with a $5mm loss and $7mm revenue in Q1 2004 with $740k profit which is an annualized revenue runrate of $28mm-not too bad in a few years. As Russell points out, I am sure a successful Jamdat offering will spur renewed interest in wireless companies. That being said, I just view wireless as another pipe, an increasingly important one that every software or web-based company will have to be aware of and leverage.

Speaking of wireless, there has been lots of talk about Time Warner launching its own branded wireless service over someone else’s wireless network. Not only does this make a ton of sense in terms of the phone company/cable bundle packaged wars but also from a content and programming distribution perspective. If you believe that wireless devices and phones will continue to become an increasingly important way for end users to access data and eventually music, photos, and video, then what better way to control the economics of distribution then by reselling your own service.

4 comments on “Jamdat Mobile files for IPO”

I have clients that struggle to get a few hundred K in Venture capital. Granted they aren’t in the hardware business.

I think wireless is certainly here, but picking a standard is going to be hard. 54G has a lot of benefits, but until encryption catches up with the wireless world I’m not sure I’d want to bet the farm on the technology.

If people knew what I could pick up from their home, work, or cell phone they’d be scared *less. With a good directional antenna you can sniff a wireless network from 5+ miles away. Some where like San Fran you can sit on the bay with your telescope, and a directional antenna and pull packets off of more than a few networks. You can’t put any of your own back on from that distance, but most the time you don’t need to.

Current Wireless encryption only takes 2-3 hours to defeat, and once defeated mechanisms that change the password on a schedule are easy to maintain the the defeat on.

Blue Tooth can be sniffed from a quarter mile, and setting up an amplifier to push signals that distance is easy enough. Giving you access to all sorts of information.

In a lot of ways the old Infra-red was a better solution for device sync because it was very directional, very line of site, and didn’t spill through walls.

Wireless security has come a long way in the last 18-24 month. MANY vendors are now providing WPA as an alternative to plain WEP security, which takes only a few hours to crack. WPA makes use of TKIP, MIC, and 802.1x to provide a very high level of security. There is a version for enterprises, as well as one for homes. So the security problem really is “solved” – for now anyway! Also, the IEEE recently ratified the 802.11i standard, which increases the security level further by using AES based encryption. Most hardware released in the last 12-18 months supports this capability.

WPA is actually easier to hack if you setup a honey pot, than wep is. You just have to have more signal than the actual WAP. but in any event if you can defeat the encryption in any amount of time then you are at risk. Even encryption schemes that claim they would take a year to crack, aren’t really an issue, I have 10 PC’s I could throw at it now 1 year is 1 month. Not a big deal if that gets me the source code to a project worth a few hundred K.

Step that up to some one who has access to a few hundred machines like an IT admin and you could defeat an encryption scheme that would take 10 year on a single pc to 30 days.

The point is that if the packets spill out of the buidling you are Fubar’d.

I doubt anyone is still reading this, but one of the comments here is so bizzare I can’t not respond. WEP hasn’t been crackable for years. Wireless devices that are less than a few years old check for weak frames and prevent them from being sent. Trolling at a recent convention here, I recieved 1 weak frame in three days.

As for the one-year comment, there’s a trivial solution to that problem: don’t use 40-bit encryption, which no one has used for the past decade anyway. If you have a scheme that will allow a PC to crack a strong 128-bit (private key) algorithm in a month with 10 PCs I’d love to hear about it. Hell, I’d be impressed if you could do it with a billion PCs. distributed.net took 1700 days to crack 64-bit RC5. They’ve been working on 72-bit RC5 for over two years and still haven’t cracked it yet.

The idea that if any encrypted packets are captured, encryption is useless is nonsensical. If that were the case, no one would use encryption at all.